Standing Committee E

[Mr. Peter Pike in the Chair]

Housing Bill

Peter Pike: I draw the Committee's attention to the fact that we made fairly slow progress this morning. Obviously, as I have said, the Chair cannot determine the important issues, given that all issues are deemed to be important. However, I am sure that the Committee is mindful of the fact that we must reach at the end of today's proceedings the point set out under the programme order that was agreed at our first sitting. I hope that I have been useful and have focused minds on making sensible progress.Clause 68 Designations under section 67: further considerations

Clause 68 - Designations under section 67: further considerations

Amendment proposed [this day]: No. 288, in 
clause 68, page 45, line 39, leave out 'both—'.—[Mr. Davey.]
 Question again proposed, That the amendment be made.

Peter Pike: I remind the Committee that with this we are taking amendment No. 287, in
clause 68, page 45, line 43, at end insert 
 ', and 
 (c) as regards its homelessness strategy and the provision of advice and assistance to those likely to be affected by the designation.'.

Yvette Cooper: Clause 68 sets out further requirements that the local housing authority must consider in exercising the power to make designations under clause 67. Under clause 68(2), a local housing authority must ensure that the use of selective licensing is in accordance with the local housing authority's overall housing strategy. In using that power, subsection (3) requires a local authority to adopt a co-ordinated approach when dealing with homelessness, empty properties and antisocial behaviour by combining licensing measures with other measures taken by it and other agencies.
 Amendments Nos. 287 and 288 would insert a provision requiring a local authority, having regard to its homelessness strategy, to make provision for advice and assistance to those likely to be affected by the designation. The local authority already has obligations relating to homelessness under part 7 of the Housing Act 1996. It is true that people who become homeless as a result of an eviction because of their deliberate behaviour are likely to be considered intentionally homeless if they apply for help under the homelessness legislation. Even in those circumstances, the housing authority would be required to provide them with advice and assistance to help to them find accommodation for themselves. Additionally, if the household fell within a priority need group—for 
 example, a family with children—the authority would have to ensure that they had accommodation available for a short period. 
 More generally, all housing authorities are required to have a strategy for preventing homelessness in their district and ensuring that accommodation and support are available for people who are homeless or at risk of homelessness. That must embrace all homeless groups, including people who become homeless intentionally. Those who become homeless unintentionally are clearly covered by the local authority's usual obligations for support for the homeless, which includes advice and assistance.

Andrew Selous: While the Under-Secretary is talking about intentional and unintentional homelessness, can she confirm my understanding that intentional homelessness will include those people who engage in persistent antisocial behaviour? Will such behaviour be deemed behaviour that is responsible for making them intentionally homeless?

Yvette Cooper: The hon. Gentleman is right to say that it is likely that someone who had been engaging in consistent antisocial behaviour and was evicted as a result would be assumed to have been made intentionally homeless. It is right that private landlords, as well as local authorities and social landlords, should have as the ultimate sanction for dealing with antisocial behaviour the ability to evict tenants or to threaten eviction when necessary. It should only be the ultimate sanction because a whole range of measures can be used before evictions need to take place, including antisocial behaviour orders. It is also right that we should work with families to try to support and improve their behaviour and deal with the problem in other ways, but it is also important that there is an ultimate sanction; otherwise we could end up with the situation in which neighbours have to move out or feel like prisoners in their own home because nothing can be done.
 It is equally right that there are responsibilities towards the homeless. There are already in existing legislation obligations to the homeless, which include the provision of assistance and advice to those who are intentionally homeless. As the clause mentions explicitly the importance of homelessness and links it with the homelessness work of the local authority, the amendments are unnecessary. I therefore ask the hon. Member for Kingston and Surbiton (Mr. Davey) to withdraw the amendment.

Edward Davey: The Under-Secretary's response was helpful. If I understand her correctly, she is saying that local authorities ought to have regard to their existing homelessness strategy—their obligations for prevention, advice and assistance—as they set about introducing a selective licensing regime. It is good to have that on record. Although there is an indication in the first two sentences of subsection (3) that that is the case, it is important that local authorities realise that they must have a joined-up approach to housing. They need to have a partnership approach with landlords and other agencies in their area, particularly the voluntary sector, because we must ensure that the
 Bill does not create the unintended consequence of an increase in homelessness.
 On the basis that I have understood the Under-Secretary correctly—and she indicates that I have—I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Edward Davey: I beg to move amendment No. 290, in
clause 68, page 46, line 2, leave out 'an' and insert 'a more'.
 For the benefit of the hon. Member for South Holland and The Deepings (Mr. Hayes) I should say that I have brought my passport along: the record of our recent discussions might help you to understand that comment, Mr. Pike. 
 The amendment is intended to ensure that the test in subsection (4)(a) is high enough. The Government are saying that local housing authorities cannot make a designation under clause 67 to selectively licence an area unless they have 
''considered whether there are any other courses of action available to them (of whatever nature) that might provide an effective method of achieving the objective or objectives that the designation would be intended to achieve''.
 I want us to think about whether authorities should be required to consider whether there is ''a more'' effective method of achieving those objectives. 
 Situations could arise in which there are alternatives to going down the selective licensing route, but it might be difficult to ensure that one of them is the best route to go down. I am trying to help the Government, and thus local authorities. I want local authorities to be able to say, ''Well, there other ways of meeting these objectives, but they are not as effective as, or more effective than, the licensing route.'' It is a small point, but it is in keeping with the spirit of what the Government are trying to do.

Yvette Cooper: I acknowledge the point that the hon. Gentleman is trying to make. It would be appropriate if these different strategies were alternatives—if there was either the approach of introducing selective licensing or other approaches and only one of them could be chosen. In practice, we would expect selective licensing to be one of a series of different approaches adopted at the same time: for example, it could be complementary with approaches using ASBOs or involving other work with the police or other agencies in the local area. Another course of action might be available that might be more effective.
 ASBOs might be the most effective course of action, but they might not solve the whole problem on their own. In addition to them, it might be sensible to introduce selective licensing, although that might not have such a big impact. The test that we have set means that the alternatives need to have been considered because selective licensing might be unnecessary, and the way in which the different strategies might appropriately link together must be considered because it is unlikely that selective licensing will be effective on its own. The real test is whether 
''making the designation will significantly assist them in achieving the objective or objectives (whether or not they take any other course of action as well).''
 Even if authorities are issuing ASBOs, which they think will make the greatest difference, they might get even further if they add selective licensing on top. The thrust of the amendment is that they should try the more effective methods first and then, if they fail, switch to selective licensing. It would be appropriate to allow them to do both.

Andrew Selous: While the Under-Secretary is talking about ASBOs, I point out that my recent experience in cases of very nasty antisocial behaviour is that it has been impossible for the police to establish an ASBO, because neighbours have been too frightened for their own safety to come forward. The Minister referred to a range of sanctions, going up to eviction. Given that my experience of ASBOs has been disappointing, can she elaborate on what, other than eviction, is left?

Yvette Cooper: Clearly local authorities can take sanctions using evictions, and the police might be able to take further criminal action, depending on the nature of the behaviour involved. I did not necessarily mean that ASBOs are more effective than selective licensing. There might be occasions on which they are not; that will always be difficult to evaluate. I am simply making the point that in circumstances in which ASBOs would be more effective, the amendment would mean that one was prevented from introducing selective licensing until one had fully implemented ASBOs, or taken that approach seriously. The thrust of the Bill is to allow local authorities to use a range of strategies, but it is important that they consider all the options first. They must also be clear that selective licensing will have benefits and that it will not prove unnecessary once other options have been taken into account. On that basis, I invite the hon. Gentleman to withdraw the amendment.

Edward Davey: I shall seek the leave of the Committee to withdraw the amendment, because the Minister has reassured me that subsection (4)(a) and (b) are not intended to prevent selective licensing from being chosen. I was concerned that the drafting might mean that the local authority had to show that it had tried various other strategies first. Potentially, the local authority could be judicially reviewed by landlords who were trying to put obstacles in the way. However, I understand from the Minister's reply that selective licensing can be implemented alongside other measures, and that reassures me.
 The hon. Member for South-West Bedfordshire (Andrew Selous) made some interesting points. He is probably aware that there are many other sanctions before ASBOs which do not require statutory cover, such as acceptable behaviour contracts and parental control agreements. Those have been tried in my constituency and piloted by colleagues in Islington, Liverpool and many other areas. They are very effective and much cheaper to implement, because they do not require a visit to the courts, with all the evidence that that requires.

Andrew Selous: The people involved in the case that is seared on my memory, and to which I have referred frequently in this Committee, are adults, and acceptable behaviour contracts are generally, as I understand it, for children, so would not be appropriate.

Edward Davey: Because acceptable behaviour contracts are not a statutory device, the local authority need not restrict them to children. One can use such techniques, and many local authorities have done so successfully. I would be out of order if I continued along that path, so I shall beg to ask leave of the Committee to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 68 ordered to stand part of the Bill. 
 Clause 69 ordered to stand part of the Bill.

Clause 70 - Notification requirements relating to designations

Edward Davey: I beg to move amendment No. 293, in
clause 70, page 47, line 7, at end insert— 
 '(ca) the conditions as laid out in section 67(3), 67(6) or by order under 67(7) under which the designation has been made, and'.

Peter Pike: With this we shall take amendment No. 294, in
clause 71, page 47, line 22, at end insert 
 'in particular, with respect to the objectives or objectives that the designation is intended to achieve.'.

Edward Davey: My amendments would ensure that when a designation notification was published, and when a designation was reviewed and potentially revoked, the objectives were made clear. Clauses 70 and 71 do not require the objectives of a designation to be set out in the notice or to be debated when reviewing or revoking a designation.
 It is a small point, but if a local authority goes to the trouble of publishing a notice stating various other things in the prescribed manner, that local authority really ought also to say why it has decided to go down the designation route. Has that been done under clause 67(3), which puts forward the set of conditions with regard to economic generation; under clause 67(6), which sets out antisocial behaviour considerations; or under clause 67(7), which sets out further considerations that the Government may make? I wanted clarification from the Minister on why there is no requirement in those processes for a statement of the original objectives of the designation.

Yvette Cooper: My right hon. Friend the Minister for Housing and Planning had intended to speak on clause 71. I will briefly answer on the basis of the principle of clause 70. Perhaps the hon. Member for Kingston and Surbiton will be happy with my answer. If not, my right hon. Friend can supply further details of the implications of amendment No. 294.
 The basic principle is that information about the designation's purpose would have to be set out as part of the consultation process. It is right that people should know why their local area is being designated—
 is it because of antisocial behaviour, or because of low demand? The local authority would have to set that out in some detail when going through the consultation process in the first instance. If local authorities chose, they could also add information when they set out the final details of the designation. We simply felt that that would be a bureaucratic duplication; the most appropriate time to mention such information is at consultation, when people can debate and appeal against it. We needed to flag up the purpose of the designation at that point, rather than at the conclusion of the process.

Edward Davey: I am not going to press the amendment, but I was not terribly convinced by the Under-Secretary's argument that it would be very bureaucratic. It would seem sensible to add one or two lines to a notice to explain why it has been issued in a public manner. Although I will not press the amendment, I would urge the Under-Secretary to talk to her officials about the matter.
The Minister for Housing and Planning (Keith Hill) rose—

Edward Davey: Obviously the Minister wants to intervene, to enlighten me.

Keith Hill: Not to intervene, but to respond. The hon. Gentleman can then answer my observations. I am tempted to say that I entirely agree with my hon. Friend the Under-Secretary and sit down, but my audience would like a little action after a long period of silence on my part.
 I shall briefly explain to the hon. Gentleman exactly why the provision in amendment No. 294 is bureaucratic. It is perfectly clear that in making the designation the local authority will have to identify the reasons and purposes for which the designation is made. It is set out in clause 67(6)(a), (b) and (c) that 
''the area is experiencing a significant and persistent problem caused by antisocial behaviour . . . that some or all of the private sector landlords . . . are failing to take action to combat the problem''
 and to make it a designation would 
''lead to a reduction in, or elimination of, the problem.''
 In making the designation, the purposes of that designation are clear. 
 Amendment 294 would require the local authority to specify in its review the purposes for undertaking that review. That, we argue, is bureaucratic and cumbersome and it duplicates activity. The intention behind the requirement for local authorities to carry out these reviews—the principle of which nobody has disputed—is obviously to assess whether the purposes set out in the designation have been achieved. In other words, it is meant to ensure that the objectives behind the designation have been, or are in the process of being, achieved, thereby ensuring that the designation is still necessary. This is exactly the same provision as that in clause 49, for additional HMO licensing. On that occasion, neither the hon. Gentleman nor his colleagues chose to object or stipulate any further qualifications to that proposal. 
 I understand why the hon. Gentleman tabled his amendment. The purposes for which designations are 
 made are inevitably going to be taken into account in the review—why on earth do otherwise? To all intents and purposes his concerns are covered in the provisions in clause 67, and for that reason I urge him to withdraw his amendment.

Edward Davey: I suspect that the Minister would not have minded the amendment being made—I suspect that there is not a lot dividing us on this issue. I was simply trying to work out why the provision was not in there in the first place, and now the Minister tells me that it is implicit. Quite a lot that could be implicit has been included in other parts of the Bill, so I am not totally convinced by the Minister's argument, but we need to make progress, so I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 70 ordered to stand part of the Bill. 
 Clauses 71 and 72 ordered to stand part of the Bill.

Clause 73 - Temporary exemption from licensing requirement

Amendments made: No. 43, in 
clause 73, page 48, line 44, leave out 'county court' and insert 'residential property tribunal'.
 No. 44, in 
clause 73, page 49, leave out line 5.
 No. 45, in 
clause 73, page 49, line 6, leave out 'court' and insert 'tribunal'.
 No. 46, in 
clause 73, page 49, line 9, leave out 'court' and insert 'tribunal'.—[Yvette Cooper.]
 Clause 73, as amended, ordered to stand part of the Bill. 
 Clauses 74 and 75 ordered to stand part of the Bill.

Clause 76 - Tests for fitness etc. and satisfactory management arrangements

Robert Syms: I beg to move amendment No. 309, in
clause 76, page 50, line 32, at end insert— 
 '(d) any recorded convictions on the sex offenders' register'.
 This amendment concerns a test of fitness and is part of a theme we introduced earlier in the Bill, which is that one ought to pay regard to people having convictions or being on the sex offenders register. This is something that ought to be considered as part of the criteria. 
 I do not intend to go on, as it is almost dark and I am interested to hear what the Minister has to say about our well-crafted amendments.

Keith Hill: Clause 76 is almost the exact counterpart to clause 55. The Committee will recall that, in our discussions on clause 55, I accepted that a local authority needs to be aware as best it can of the actions of licensed managers whose actions might
 subsequently make them unfit to be a licence holder. I undertook at the conclusion of our exchanges to give further consideration to adding sex offences to the list and I do so again in connection with clause 76.

Robert Syms: I thank the Minister for his answer. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 76 ordered to stand part of the Bill.

Clause 77 - Licence conditions

Edward Davey: I beg to move amendment No. 296, in
clause 77, page 51, line 25, after 'requiring', insert 'reasonable'.

Peter Pike: With this it will be convenient to discuss the following amendments:
 No. 292, in 
clause 77, page 51, line 26, at end insert— 
 '(ba) conditions requiring the written statement of terms in paragraph 1 (5) of Schedule 4 to contain details of— 
 (i) the responsibilities of the occupier in respect of his own conduct; 
 (ii) the responsibilities of the occupier in respect of the conduct of other occupiers and visitors; 
 (iii) the ways in which the licence holder may address any nuisance or annoyance caused to others by persons occupying or visiting the house.'.
 No. 298, in 
clause 77, page 52, line 10, at end insert 
 ', except in relation to matters contained in Schedule 4 to this Act.'.
 No. 310, in 
clause 77, page 51, line 30, at end insert— 
 '(d) conditions regarding equipment necessary to limit the susceptibility to fire hazards'.

Edward Davey: As with the previous amendment, many of the arguments relating to these amendments were rehearsed at our sitting on Tuesday. My hon. Friend the Member for Ludlow (Matthew Green) explained our position. I was in the Gallery to hear the Under-Secretary's reply to the debate and, with respect to the force of amendment No. 296, she made it clear that she considered that the notion of authorities and landlords taking ''reasonable'' steps was already implicit in local authority legislation more generally. She may wish to confirm that in response to this debate. I shall not talk about the amendment too much more, although it would not be too onerous to add ''reasonable'' to the clause to remind people who implement the legislation that they should be reasonable, which some tend sometimes to forget.
 I am grateful to Shelter for its help in drafting amendment No. 292. We want to make sure that the issues in respect of antisocial behaviour are made clear to the tenants, when they sign their contracts. It does not seem too onerous to ask for written statements of terms that are required under schedule 4. The amendment refers to the 
''responsibilities of the occupier in respect of his own conduct''
 and 
''the responsibilities of the occupier in respect of the conduct of other occupiers and visitors''.
 Such key points go to the heart of the practical debate about antisocial behaviour. We have had such a debate before, so I shall not prolong my remarks now. However, will the Under-Secretary give me a clear explanation of why it would be wrong to ask for written statements to cover such points because that seems very much line with the Government's approach?

John Hayes: The hon. Gentleman has hit upon an interesting and useful point. It seems that there is a relationship between the responsibilities of occupiers and those of their visitors. He will know, as will members of the Committee, that in our casework issues frequently arise when an occupier's visitors cause as much difficulty in the neighbourhood as the occupier does himself. I shall not go into great detail, but I am sure that there will be many occasions when the relevant authorities have not been able to solve a problem, not because the people causing it did not have a legal relationship with them but because they were visitors to a house. That applies to local authority properties and properties of registered social landlords, as well as private properties. It is a valid point to raise at this stage of our proceedings.
 I am, however, concerned about proposed new sub-paragraph (ii), which refers to 
''the responsibility of the occupier in respect of the conduct of other occupiers''.
 That is a more difficult point to make persuasively, given that the other occupiers might be responsible adults. It is dangerous to include in legislation the idea that one adult should bear responsibility for the behaviour of another, whom they may not be able to influence.

Edward Davey: I am trying to understand the hon. Gentleman's point, because he agreed with the inclusion of ''visitors'', who may also be adults, in proposed new sub-paragraph (ii). His argument about other occupiers should apply to visitors. Is he being inconsistent?

John Hayes: I am sure that the hon. Gentleman is far too intelligent to be unable to make that distinction. If someone is invited to a home as a visitor, it is not unreasonable for an occupier to have some responsibility for what they do. That is the common experience of most people who invite visitors to their home, be they friends, acquaintances or family members. One's relationship with another occupier in the same premises is entirely different. The proper duty and responsibility in respect of visitors do not necessarily extend to other occupiers, who might not agree with one's view of what is responsible. There is an essential difference between those two relationships.
 The hon. Gentleman made a forceful point with respect to visitors, but it would be difficult to enforce proposed new sub-paragraph (ii), which would mean that one occupier should have responsibility for another. That would be impossible for any authority to implement. He has not intervened to clarify the point further, so on that basis I am at pains to point 
 out that, although we have sympathy for the principle of the amendment, the detail is deeply flawed.

Sally Keeble: I wish to raise certain issues, although it may be appropriate to respond on them later. There used to be a process for short-lifing substandard properties—particularly in London, Birmingham and other big cities—so that they were used by housing authorities to house groups of people, especially young, single people, who would tolerate lower living standards. Housing associations finally began to object to that practice. They argued that the system was supposed to extend the life of a property and relieve housing pressures in high-demand areas, but that it ended up condoning and institutionalising substandard housing instead of demolishing it and rebuilding.
 How will licensing work to improve areas of housing, rather than institutionalising areas of substandard housing and condoning housing that should be demolished? If thought is not given to the management, and the implementation is not monitored, it could end up having that perverse effect. The standards built into the licence conditions might ensure that licensing improves housing, rather than becoming a means for accepting substandard accommodation. I am not asking for a reply now, but comments later would be helpful.

Yvette Cooper: First, let me respond to the points made by my hon. Friend the Member for Northampton, North (Ms Keeble). I will talk to her further about the situations she discussed and respond in writing in due course. The Bill's intention is certainly not to institutionalise substandard housing, but to provide mechanisms—the levers—for local authorities to improve an area if they cannot currently do so. We should consider that in the context not simply of selective licensing measures and those for houses in multiple occupation, but of the proposals relating to interim management orders, which we have yet to discuss. Some of those mechanisms may be the right way to deal with the problem that my hon. Friend describes. Perhaps we can discuss that further.

John Hayes: I wonder whether we are returning to the issue of the consultation and the reasons for designation. If those reasons are set out clearly during the process of consultation and notification, and they bear heavily on a desire to improve the area, that may go some way towards satisfying the concern voiced by the hon. Member for Northampton, North. If the reasons for the designation being made and the objectives or ideal outcomes are clear to all concerned—landlord, tenant and the neighbourhood—the problem that she quite understandably raises could be avoided.

Yvette Cooper: That may be a factor. Certainly the way in which an area is designated, the reasons for that and the need to be clear about the fact that the process of selective licensing will contribute to the objective will be important. So, too, may be the conditions prescribed in the circumstances and what conditions are appropriate. Those will vary from area to area, depending on the nature of the problem.
 Some additional issues, such as IMOs, might be a way to deal with the matter. When a property does not get a licence or cannot be licensed because the licence holder or the applicant is not a fit and proper person, or for whatever reason, there may be other action that the local authority can take at that point. That action may be critical to preventing the problem that my hon. Friend the Member for Northampton, North describes. 
 Clause 77, which is similar to clause 56, states that certain conditions, which are set out in schedule 4, must be included in the licence, and lists the type of conditions that local authorities may include. The list is not exhaustive. 
 Let me respond to the four amendments. The discussion on amendment No. 296 was similar to the one that we had on clause 56. As I said then, the word ''reasonable'' is not necessary in this context, for two reasons. First, the beginning of clause 77(2) already includes the phrase 
''so far as appropriate in the circumstances'',
 so the reasonableness test is implicit. Secondly, a local authority, just like any other public body, is subject to the reasonableness test anyway. That word is part of the test that local authorities must meet. 
 Amendment No. 310 raises issues similar to those that have already been debated. Under clause 77(2)(c), it is already possible to include equipment necessary to limit susceptibility to fire hazards. Some of those issues are also dealt with in part 1. 
 Amendments Nos. 292 and 298 raise interesting issues. On the face of it, amendment No. 292 appears perfectly sensible. It suggests that one condition that local authorities may want to consider is requiring a written statement of terms to include various matters, including the responsibilities of the occupier. All that is possible already. The amendment would be to clause 77(2), which lists the conditions that local authorities may include, but that list is not exhaustive. 
 The hon. Member for Kingston and Surbiton did not mention amendment No. 298, but it raises some of the most interesting issues. There are questions about the relationship between clause 77(2) and (6), which states: 
''A licence may not include conditions requiring . . . any alteration in the terms of any tenancy or licence under which any person occupies the house.''
 Subsection (6) was intended to make it clear that selective licensing is not about reintroducing rent control or getting into that debate. Equally, there are questions about things that might already be in a tenancy and that could affect the conditions that a local authority might want to include in a licence. 
 I have already said that I would look further at clause 56 and the wording that we discussed on controlling behaviour. For those reasons, I would now like to look further at clause 77 and at the interaction between the two subsections in question. I shall report back to the Committee later. On that basis, I ask the 
 hon. Member for Kingston and Surbiton to withdraw his amendment.

Edward Davey: I am pleased that the Under-Secretary mentioned amendment No. 298, which occurred to me late at night, when I was trying to understand how different things in the Bill worked together. I forgot to mention that amendment, but it obviously pleased her and her officials more than any of my other amendments.
 I thank the Under-Secretary, because subsection (6), to which amendment No. 298 relates, could create difficulties and inconsistencies, and it is right that she should consider that. I am also grateful that she reiterated the point about the word ''controlling'' in subsection (2)(b) and how that mirrors our debate on clause 56. Given such a helpful reply, I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Edward Davey: I beg to move amendment No. 297, in
clause 77, page 51, line 26, leave out 'relating to'.
 This is obviously the most important amendment that we have had to debate. Actually, it is a drafting amendment that I assume the Government will accept forthwith. As drafted, subsection (2)(b) says that 
''conditions requiring steps to be taken with a view to controlling relating to the behaviour of persons occupying or visiting the house''.
 That does not read terribly well and I think it is grammatically incorrect. The amendment would delete ''relating to'' and make subsection (2)(b) read correctly. The only reason that I can think of for not accepting it readily is that the Under-Secretary is going to review the word ''controlling''. However, we have not had an answer on that yet, so I hope she accepts the amendment.

Yvette Cooper: I accept the hon. Gentleman's entirely sensible amendment.
 Amendment agreed to. 
 Clause 77, as amended, ordered to stand part of the Bill. 
 Clauses 78 and 79 ordered to stand part of the Bill.

Clause 80 - Revocation of licences

Robert Syms: I beg to move amendment No. 311, in
clause 80, page 53, line 43, at end insert— 
 '(d) where the licence holder is deemed to have committed a serious criminal offence'.
 This is a fairly simple amendment, and I shall be interested to hear whether the Under-Secretary considers the Bill as drafted already to cover what it proposes. We think that the issue ought to be explored and it would be useful to have something on the record, so that the authorities that deal with the matter know the Government's intentions.

Alan Whitehead: I am somewhat concerned by the amendment, because it would add a requirement without clarifying whether it reads across to part 2.
 If a local authority has decided to withdraw from a landlord a licence issued under the general requirement to register houses with more than five people and three storeys, perhaps because of his criminal record, but then selectively extends a licence for other purposes—perhaps because of pressure on HMOs or low demand—and that landlord also has a house in that area, does the landlord automatically lose that other licence or is a separate procedure required? As far as the amendment is concerned, that would introduce an irregularity between those two circumstances, and would produce a non-read-across outcome. Will the Under-Secretary clarify that point, which also relates to that which the hon. Member for Poole (Mr. Syms) makes with the amendment?

Yvette Cooper: If I have understood my hon. Friend correctly, the answer is that separate licences will be held for different properties, so licences would have to be revoked separately if there was any concern about a licence holder not being a fit and proper person. The measures in this part of the Bill are parallel with the part that deals with houses in multiple occupation, so we would expect it to be relatively easy for a local authority to deal with a landlord who has an HMO licence and a licence in a selective licensing area.
 The amendment would give a local authority the power to revoke the licence of a landlord who commits a serious criminal offence. Under subsection (2)(b), a local authority can decide whether a licence holder is a fit and proper person, and it is hard to see how someone who has committed an offence involving violence, fraud or deception could be considered a fit and proper person, so the amendment is subsumed by that subsection. We discussed this issue with officials and tried to come up with an example of a serious criminal offence that a landlord might commit, but still be considered to be a fit and proper person.

Sally Keeble: There have been some notorious landlords, such as van Hoogstraten. People might ask whether someone like him would be allowed a licence under this system, and might think that they should not, even before a conviction.

Yvette Cooper: I hesitate to comment on individual cases. There are two ways in which one might think of somebody being fit and proper. The first is on their record as a landlord, and the second is on other aspects—for example, if they have committed a criminal offence involving serious fraud. One would certainly question whether such a person should be a landlord.
 After considerable brain racking, the only example of a criminal offence that the officials could suggest was treason, on the basis that the editor of The Guardian has been through the courts debating treason, but that that might not affect his capability to be a landlord. Given that they decided not to put that suggestion in writing, they may not be happy to stand by that as a detailed record of their advice.

Alan Whitehead: I hope that the Committee will forgive me for pressing this point, but the circumstances under which this clause reads across to part 2 are still not clear to me, inasmuch as I can
 envisage circumstances such as those in the example that I shall outline.
 Let us suppose that a local authority decides to withdraw a licence from the landlord of a three-storey property with eight people in, on the grounds that it is badly maintained and he is not fit to be a landlord. The local authority then extends its area to a local authority area in which there are houses that do not have three storeys and that have fewer than five people in them. It turns out that the landlord also has houses in that area and is the landlord of those houses, but has not done anything to cause the local authority to question the management of those particular houses. As soon as the local authority extends a licence by national agreement to that area, does that landlord automatically lose the licence in the area that has been so designated because he or she has had his or her licence withdrawn so far as the general scheme is concerned, or is a separate procedure necessary to achieve that purpose? Indeed, could that landlord have a licence, and continue to have a licence, in that particular area with a house with fewer than five people in it and with fewer than three storeys, even though he or she has been deemed unfit under the scheme so far as the local authority is concerned?

Peter Pike: That intervention was a little long, but I let the hon. Gentleman finish.

Yvette Cooper: Let me try to set out my understanding of the position. Someone who was not deemed to be a fit and proper landlord to hold a particular licence under part 2 would not automatically be unable ever to hold a licence under part 3. However, one would certainly expect there to be quite a lot of read-across. If there are particular reasons why someone has not maintained a property and has let the whole place collapse, has not installed a smoke alarm or addressed antisocial behaviour in an HMO, and has not exercised their responsibilities in all sorts of ways, the chances are that they will not do so in individual properties that they might also hold in a selective licensing area. There may be certain issues to take into account when deciding whether or not someone is a fit and proper person. Equally, however, it might be possible to envisage circumstances in which one would have to justify why someone might not be able to hold a licence for one type of property, but might be able to hold one for another. It would be possible for a local authority to take a different decision on two types of licence. In practice, however, the chances are that the local authority is likely to take its experience of a particular landlord in one area as evidence of whether or not they are a fit and proper person to hold a licence in another.

Karen Buck: To clarify the point, if a local authority were to choose to revoke or not to grant a licence to a landlord on the ground of their record in another area, would it be open to a challenge on that?

Yvette Cooper: It is always open for landlords to appeal. There is a tribunal process that allows landlords to appeal, and it is right there should be one. However, the local authority would have quite a lot of evidence to produce in its favour. The landlord
 would have to explain why their behaviour had completely changed since they lost their previous licence, whenever that was, or why there was such a massive difference between their ability to manage one type of property and their ability to manage another. In the end, the tribunal will have to decide, but if a local authority has considerable evidence of the fact that someone was unfit to manage one type of property, it is in a relatively strong position to argue that that person is therefore not a fit and proper person to hold a licence. That does not automatically follow, however, simply because individual licences need to be held for individual properties. Equally, however, the fact that measures in both parts of the Bill are so similar would very much allow local authorities to offer the same sort of evidence in both cases.

John Hayes: The Under-Secretary needs to address two points. First, having established that it is very difficult for someone to be fit and proper if they are a criminal, but that they can be unfit and improper without being a criminal, we end up in the situation that began to emerge from the intervention made by the hon. Member for Southampton, Test (Dr. Whitehead), namely that it is quite possible for a landlord to be a fit and proper landlord in one place, but a very bad one in another. Secondly, given the high level of discretion that the Bill affords local authorities, it is entirely possible for different local authorities to take different views about what constitutes fit and proper conduct. That brings us back to the issue of consistency, which is the issue that I have constantly argued is of fundamental importance. Would the Minister like to reflect on this and come back to the Committee at a later stage?

Yvette Cooper: I acknowledge the hon. Gentleman's point, but it would simply not be possible for the Bill to proceed differently and in a way that would provide improvements. Whether someone is a fit or proper person to hold a licence for a particular property is in part going to depend on the kind of property. Somebody may be able to argue—this is why there is no automatic link—that they have the expertise to manage a small terraced property whereas they do not have the expertise to manage a large HMO. They may be able to put a case to the effect that they are a fit and proper person, with the skills or ability to do one and not the other. Local authorities will want to take into account all the evidence and make a judgement on that basis.
 These cases need to be argued on their individual merits, rather than our attempting to prescribe in legislation either, for example, an automatic read-across from one to another, which does not give local authorities the flexibility to determine the cases separately, or, trying to define every aspect of what being fit and proper means, in the Bill or in guidance, when again it will depend on the individual circumstances.

John Hayes: Forgive me for being so assertive, Mr. Pike, but I am not sure the Under-Secretary is right. The guidance would be helpful in this respect, because
 what the hon. Members for Southampton, Test and for Regent's Park and Kensington, North (Ms Buck) are beginning to tease out is that unless there is sufficient consistency in this area, it may well be that there could be a successful legal challenge. One of the classic bases of legal challenge is that someone has not been treated equitably, that they are being treated in entirely different ways in what could be cheek-by-jowl circumstances. This might be an area where the Bill needs to be tightened, at least through guidance—I put it no more strongly than that. The hon. Gentleman and the hon. Lady have a valid point, and it explains why my hon. Friend the Member for Poole was right to raise this issue.

Yvette Cooper: The need is to decide whether cases are precisely similar or whether there are different circumstances. That is why the judgment needs to be taken on the individual cases at stake. First, it is right for the local authority to be able look at the merits of the individual case and decide whether they are similar, relevant or different. Secondly, there should be an appeal to an independent tribunal, which can decide whether there are huge inconsistencies in the way local authorities are approaching this or are not taking account of relevant evidence about the differences. It would then be up to the independent tribunal to come to a different conclusion. Equally, where the local authority can demonstrate perfectly relevant information in taking into account people's experience managing other properties, the independent tribunal is likely to find in its favour.
 The problem arises when we try to anticipate every possible local example and to solve those problems in this Committee. A system should be set up that allows local authorities the flexibility to take sensible decisions dependent upon those local circumstances, and for there to be an appeals process for landlords who feel unfairly treated. On that basis, I would ask the hon. Member for Poole to withdraw amendment No. 311.

Robert Syms: This has been a useful debate and I am grateful to the hon. Member for Southampton, Test for explaining so that even I start to understand what we are trying to do. Putting that on the record is useful. I am extremely tempted to press to a vote what has been described as our Guy Fawkes amendment, as Her Majesty's Opposition are very keen that traitors should not be residential landlords or managers. However, I have been dissuaded from doing so because of the lateness of the hour. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 80 ordered to stand part of the Bill. 
 Clause 81 ordered to stand part of the Bill.

Clause 82 - Offences in relation to licensing of houses

Robert Syms: I beg to move amendment No. 299, in
clause 82, page 55, line 16, at end insert— 
 '(3A) A lender who has taken possession of an HMO that should be licensed but is found not to be so, would not be guilty of an offence in relation to licensing of houses under this Part.'.

Peter Pike: With this it will be convenient to discuss amendment No. 300, in
clause 83, page 55, line 44, at end insert— 
 '(2A) In the circumstances where a lender has taken possession of the property, subsection (2)(a) and (b) do not apply.'.

Robert Syms: Amendments Nos. 299 and 300 have been tabled because of the concern of the Council of Mortgage Lenders and other lenders that when taking over a property, or even several properties from one owner, they may in the event of his defaulting on payment end up being prosecuted because, almost inevitably, someone who gets into financial mess may also be in a mess in their other affairs.
 We are looking to the Minister to reassure the various building societies, banks and other lenders that the Bill is sufficiently flexible, so that if they are in possession of a property in those extraordinary circumstances they will not face the sanctions of the law—or at least not for a period—and thus will have time to put their affairs in order. The general concern among mortgage lenders is that unless it is made clear, some of them might be tempted not to loan money to people in that sector—and we are anxious that there should be a decent supply of private rented property. I am looking for assurances from the Minister.

Keith Hill: Clause 82 provides that an offence punishable by a maximum fine of £20,000 is committed if a person has control of or manages a property required to be licensed, but which is not licensed. Clause 83 provides that no rent is payable by the occupiers, and no charge can be made in lieu of rent, during the period when a person is guilty of the offence of having control of or managing a house that should be licensed.
 Amendment No. 299 seeks to exempt a lender who has taken possession of a property requiring to be licensed, but not licensed, from committing the offence, so that they would not be liable to the £20,000 fine. Amendment No. 300 goes a step further by seeking to exempt such a lender from the provision that no rent or charge is payable by the occupiers of the property, and that no charge can be made in lieu of rent during the period. 
 I understand the hon. Gentleman's reasons for moving the amendment. Its aim is to ensure that reputable mortgage lenders who need to repossess properties are not inadvertently caught out by the provisions, and thereby subjected to the heavy penalty. I shall explain why I believe it to be unnecessary. 
 First, I believe that a lender taking repossession of a property that could fall within the scope of licensing would be likely to seek to obtain vacant possession of the property. If the property was vacant, there would be no requirement for it to be licensed. Secondly, during any period when a lender had taken possession of a property and was taking steps to remove the occupiers, it would be possible to apply for a temporary exemption notice, and the local housing authority would be able to grant such a notice. However, if the lender had no lawful way of 
 removing the occupiers of the repossessed property, or if it decided to continue to keep the property as rented accommodation, which would require a licence, we would expect the lender to seek to obtain a licence in order to ensure that the property was managed properly. 
 I do not envisage any difficulty in reputable lenders being granted a licence, as we expect that they should easily be able to satisfy the licensing criteria. There is potential for opening up a huge loophole in the legislation if any person or company, however big, small or disreputable, could be exempted from the licensing provisions merely because someone to whom they had loaned money had defaulted on the loan. 
 I hope that the hon. Gentleman is satisfied that provisions in the Bill safeguard the interests of reputable lenders. In those circumstances, I would naturally expect him to withdraw the amendment.

Robert Syms: I am partly satisfied, although the Minister still has not gone far enough. It is possible that if there were a major landlord with several properties in a town, a lender trying to get vacant possession of several of those might cause a serious housing problem in the short term—if they had the right to do that. I repeat that if someone has got into financial difficulties, their affairs may not be in order and it may take a while for a reputable institution to sort things out. I would not want the full power of the law to fall on someone who was trying to sort out a situation for the benefit of the community—for the investors in a bank or building society, or the tenants, who might be glad that circumstances had changed. We may have to return to this item during later sittings. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Amendment made: No. 47, in 
clause 82, page 55, line 32, leave out from 'so,' to end of line 34 and insert 
 'one of the conditions set out in subsection (8) is met. 
 (8) The conditions are— 
 (a) that the period for appealing against the decision of the authority not to serve or grant such a notice or licence (or against any relevant decision of a residential property tribunal) has not expired, or 
 (b) that an appeal has been brought against the authority's decision (or against any relevant decision of such a tribunal) and the appeal has not been determined or withdrawn. 
 (9) In subsection (8) ''relevant decision'' means a decision which is given on an appeal to the tribunal and confirms the authority's decision (with or without variation).'.—[Yvette Cooper.]
 Clause 82, as amended, ordered to stand part of the Bill.

Clause 83 - Further sanctions relating to unlicensed

Edward Davey: I beg to move amendment No. 295, in
clause 83, page 55, line 44, at end insert 
 'and 
 (c) section 21 of the Housing Act 1988 (c.50) shall not apply.'.
 I apologise to colleagues, because it may take a little time to introduce this important amendment. Let me start by describing the background. 
 Clause 83 would ensure that where a landlord has not got a licence under part 3, they cannot collect the rent. That is a sanction on the landlord, which seems reasonable. However, the Select Committee had a problem in considering the draft Bill, because that ''no rent payable'' clause could lead to a tenant being evicted by the landlord. The landlord who was not licensed might be concerned that he was not getting rent and find other ways, outside the provisions in the clause, to try to evict the tenant. 
 People from Shelter, the Brent Private Tenants Rights Group, which gave evidence to the Select Committee, and the Local Government Association have expressed some concern that the ''no rent payable'' clause may work against the interests of tenants. It is important that we consider it. I know that it was debated previously under part 2, but it is worth returning to and, although Government Whips are worried about the prospect of their boss entering the Room, I suggest that they will not need to be evicted if they pay close attention. 
 There is a concern that under section 21 of the Housing Act 1988, landlords can use an accelerated possession procedure to evict tenants, and if we do not disallow action under that section we could see a lot of tenants being chucked out as landlords try to avoid the licensing process. That would go against the thrust of the Government's strategy. When the Government and officials gave evidence to the Select Committee they argued that we need not worry about that, because the council could intervene through an interim or final management order and take over the management of the property. I understand that that is the Government's response to this point. I hope that the Minister will think again, because the Select Committee said that it felt that that response overestimated the council's capacity to intervene, particularly given that there is no track record of using these interim and final management orders, and we do not know whether they could be used to provide the sort of protection that the Minister and the officials envisaged. 
 There are other reasons why we should be concerned. One has to remember the practicalities of the private rented sector. Before people who have assured shorthold tenancies use the clause and stop paying rent, they need to know that they have protection against eviction. 
 In many ways, we should be most concerned about housing benefit recipients. They will have no choice as to whether they continue to pay their rent to avoid eviction; the housing benefit will not be paid. While the discussion is going on, the local housing authority, which is deciding not to license the landlord, will not pay the benefit. Therefore, the landlord will not get any rent and might decide to take action to evict the tenants and make other arrangements. 
 That is a real worry, and the Government have not yet given a proper answer. Since our debate last Tuesday, the Minister's responses have been carefully analysed—not by me, I hasten to add, but by Shelter. In a similar debate last Tuesday, he suggested that there was a degree of inconsistency and a lack of clarity as to whether the Government's way out—the interim management orders—would work. Let us consider the argument. At one stage he seemed to suggest that we should not worry because, without a licence, the tenancy would be unlawful anyway. He said: 
''If an HMO cannot be lawfully operated without a licence, any tenancy agreement in an unlicensed HMO will be unlawful.''
 That was interesting, because it seemed to go against other remarks that he had made, and what we thought was in the Bill. Just before that, he had said: 
''Occupiers' security of tenure is not affected by the provision, and nothing in it affects the terms of occupancy other than the payment of rent.''—[Official Report, Standing Committee E, 27 January 2004; c. 239.]
 Elsewhere, the Minister seemed to be arguing that the tenancy would not be unlawful, and that was how we had understood it; just because there was no licence, it did not mean that the tenancy came to an end. The tenancy stood, but there was no rent payable. I should like some clarification of what the Government are saying; the Minister's words might have been a slip of the tongue, but we need to start from the same basis. Just because a home—in that case an HMO, in this case a home in a selective licensing area—is not yet licensed, the tenancy of that home is not, as we understand it, unlawful. I should be glad of clarification on that. 
 Our other concern was that the Minister said that a landlord using section 21 of the 1988 Act would not get very far, because a court would not be convinced by his attempt to use the accelerated process to evict the tenant, given the fact that the landlord had no licence. We are not sure that it would work like that in reality. Think about the tenant. Tenants must be aware—this is a big assumption—that the property should be licensed. Not everyone knows whether his property is in an area for such licensing. Then they have to be aware that the landlord does not hold a licence and that they should not, therefore, be paying rent. That is to make several assumptions about the knowledge of the tenant. Then we have to make an even bigger assumption—that the tenants are also aware that the council can help to police the licensing regime, and will therefore tell the council that the landlord has served a section 21 notice, hoping that it will come and help. That seems unlikely. 
 The Minister says that if those assumptions all hold—which is unlikely—and the tenants understand their rights and understand that the council could help them, the council will then grant a licence or make an interim management order. Which of those is likely to happen? Given that the landlord is not compliant and is in that situation because he or she is unlicensed, it is unlikely that the council will suddenly grant a licence. The suggestion made by the Minister last Tuesday was therefore not terribly helpful. 
 We therefore return to the solution proposed by the Select Committee: in a case in which the tenant really understands his or her rights and seeks redress from the council, the council would make an interim management order. To examine that possible action, we must refer to clauses 87 and 89, which deal with making interim management orders. To make an interim management order that would apply in such a case, in order to provide the tenants with some protection, clause 89(3) states that the local authority must be convinced that there is 
''a threat to evict persons occupying a house in order to avoid the house being required to be licensed.''
 In other words, the local authority must be convinced that the eviction that the landlord is trying to carry out is a deliberate attempt to evade the licensing provisions. The interim management order, which the Government say provides protection for the tenant, would not apply in many cases because the landlord might be seeking possession in a way that could, on the face of it, seem reasonable, and would not necessarily be deemed to be related to his desire to escape the licensing regime. 
 The way in which clause 89(3) is drafted does not seem to provide the protection that the Government suggest. Moreover, the subsection applies only to part 2 and not to part 3. So in part 3 there is no protection provided by an interim management order. In light of what we discussed on Tuesday and have discussed today, I suggest that the protection for tenants that the Government believe is provided would not work.

Vera Baird: The hon. Gentleman makes some troubling and complex points. Would it be more straightforward if the Government considered adding two more offences to clause 82, namely an offence of trying to obtain rent while not holding a licence or an offence of trying to evict while not holding a licence? That might be a more straightforward way of dealing with the problem.

Edward Davey: The hon. and learned Lady makes a valid point, which I should like to study. We are discussing the law of unintended consequences—we devise the law but do not realise its effects. Given the sensitivities in this area, I would want to study her proposal and I hope that the Minister will also do so, because it seems to have some merit and addresses that particular problem.
 I know that my opening remarks have been somewhat lengthy, but it is vital for the Government to get things right or there will be those unintended consequences. I conclude by summarising my argument for the Minister. He cannot seriously tell the Committee that the provision of an interim management order is an adequate safeguard for those served with a section 21 notice as a result of choosing not to pay the rent on an unlicensed property. I do not think that the provision to which the Government have turned will help, nor do I think that it will apply to those cases in which the council chooses not to pay the housing benefit on an unlicensed property. One must think profoundly about the unintended consequences of the provision. 
 What happens when clauses 87 and 89 no longer apply? Would the landlord try to wreak his revenge, perhaps through a retaliatory eviction? He could say to the tenant, ''You've caused me a lot of trouble. I've had to face that interim management order, but now it's gone, I'm going to evict you.'' 
 Ministers must think carefully about that. I understand that it is complex and that they may want to return to it. They might also want to highlight things that I have missed and pick holes in my argument, which would mean a more protracted debate. However, I hope that my point will at least get due consideration.

John Hayes: The hon. Member for Kingston and Surbiton has stumbled on an important point. I had wanted to give the Ministers an opportunity to shine, given our audience, but as it has changed a little, they will not need to shine so brightly, although I am sure that that will not prevent them from dealing with the matter with their usual assiduous qualities.
 The hon. Gentleman has a strong point: there is a real problem with the Bill's implications in relation to the details of tenancies. As he pointed out, that was clear from the Minister's comments on 27 January, and it is worthy of repetition. The Minister said: 
''any tenancy agreement in an unlicensed HMO will be unlawful''—[Official Report, Standing Committee E, 27 January 2004; c. 239.]
 That means that the protections that should properly be available to tenants would not have any effect. That is not the Bill's intention, but it may be its consequence. 
 The problem was highlighted by the Select Committee and the Law Society when they considered the draft Bill. The Law Society said: 
''We have particular concerns in relation to the provisions in the proposed licensing schemes allowing for the non-payment of rent for the period during which a property is not licensed''.
 The Government themselves accepted the principle that tenants should not be evicted because their landlord is unlicensed. However, as Shelter made clear both in its briefing and when I met representatives today, there are real worries that landlords may use the interregnum during which the protection for tenants is slight to take action that is injurious to the interests of some of the vulnerable people that we are aiming to protect through the process of licensing. That is the ironic paradox at the heart of this part of the Bill: we may be putting tenants who are in the hands of unscrupulous landlords in a more vulnerable position. 
 I thought of that point when I read the Bill and we considered tabling an amendment, but I do not think that the amendment of the hon. Member for Kingston and Surbiton is the appropriate tool to deal with the problem. By removing the proper powers that landlords have under the Housing Act 1988, we would alter the balance too far against their interests. 
 Committee members know that the 1988 Act empowers landlords to evict tenants at two months' notice. I agree that this part deals with unlicensed properties, but given that we are uncertain about the speed at which authorities will handle the licensing process, it is not inconceivable that, if amendment 
 No. 295 is passed, landlords will have few rights to do anything about a tenant while they are properly trying to acquire a licence. A dilatory local authority might not deal with an application in the six to eight weeks that might be reasonably expected, and if that became 16 weeks, a landlord could be left with no legal protection from a tenant whom he might wish to evict for perfectly good reasons. We can all think of a range of reasons that might apply. 
 I read the Official Report of the Second Reading debate of the Housing Act 1988 and the Liberal spokesman, the hon. Member for Southwark, North and Bermondsey (Simon Hughes), made no mention of that kind of intent. He spoke at great length about those matters on that occasion, as he has on many others. I looked at the Official Report of the Committee debates on that Act, held on 26 January 1988. No hon. Member from any side of the Chamber suggested that that should be the intention of the Act. Hon. Members argued about many things in that Act. Many amendments were moved. Nobody sought to reach a conclusion whereby landlords were prevented from having any legal powers to deal with tenants in the way that I have described. 
 The hon. Member for Kingston and Surbiton raises an important point. He is right that it would be entirely undesirable to leave tenants in the position that I have described and that he described earlier. The amendment is a ''blunt instrument''. That is exactly how Shelter described it to me.

Edward Davey: I am more than happy to accept that there may be other ways to do that. I prefaced my remarks in a probing amendment. The hon. and learned Member for Redcar (Vera Baird) told us that there may be other ways of dealing with the problem.
 The hon. Gentleman's criticisms of the amendment are wrong. We are not suggesting that all landlords should have their rights taken away under section 21 of the 1988 Act. Landlords who are unlicensed in an area that has been selectively licensed for a short period should have no recourse to section 21. It is a temporary suspension of their rights under that piece of legislation. If they co-operate with the local authority in order to be licensed, that would not be a long period.

John Hayes: It might not be a long period, but it could be an extremely painful one. Committee members are trying to find an appropriate balance of the entitlements and responsibilities of both landlords and tenants. I share the hon. Gentleman's concern that tenants might be harassed by an irresponsible landlord as an unintended consequence of this part of the Bill. If he managed, through his eloquence, to rally the necessary support for the amendment to be agreed, it would leave a gaping hole in the rights of landlords to act properly in the interregnum when a licence is being sought but is not yet in place. It might be the case that a local authority was dragging its feet in dealing with the matter.
 I remind hon. Members of the Housing Act 1988. Section 21(1) (a) and (b), which the hon. Gentleman 
 wants to remove, are not unreasonable. In dealing with shorthold tenancies, the Act states: 
''(a) that the assured shorthold tenancy has come to an end and no further assured tenancy (whether shorthold or not) is for the time being in existence, other than a statutory periodic tenancy; and
(b) the landlord or, in the case of joint landlords, at least one of them has given to the tenant not less than two months' notice stating that he requires possession of the dwelling-house.''
 The landlord should be able to end the tenancy. That is not unreasonable. The withdrawal of that right—even for a temporary period—would put everyone concerned in an extremely difficult position. The hon. Member for Kingston and Surbiton highlighted that issue, and I have made a case for its consideration. Will the Under-Secretary consider the matter carefully, consider ways of filling the gap at later stages of the Bill and amend it in such a way that landlords retain appropriate rights? The amendment would not allow them to so. Tenants need protection: they are in a situation that could place them in jeopardy. 
 I am confident that the Under-Secretary has heard my comments and those of the hon. Member for Kingston and Surbiton and equally confident that, with due diligence, they might be taken into account as the Bill progresses through this House and the other place.

Vera Baird: I was very worried about this issue, which I raised on Second Reading to a limited extent. One of my particular concerns is that although having a property occupied by tenants without a licence incurs a fine, it is a one-off; the continuing punishment is inflicted on behalf of the public authorities by the tenant by withholding their rent. That seems a bad principle because it is a recipe for friction. In my view, if we intend to continue to punish a landlord who does not license their house, it would be better if there were continuing fines so that the landlord would pay a fine every day that they did not license their house.
 Another difficulty is that clause 83 states that no rent is to be paid during any period when an offence of being unlicensed is committed. At what point is an offence committed? To be sure that the offence has actually been committed, one has to go to court to get the conviction. What happens in the meantime? Let us imagine that a landlord is unlicensed for a while. They have been summonsed to court, which takes a week or two. Does the tenant carry on paying rent, and get their money back when the conviction comes through and it becomes clear that a criminal offence has been committed? That seems completely unsatisfactory. 
 In truth, I do not have an absolute solution. I doubt that the tenancy becomes unlawful because of the absence of a licence; I hope that it does not, because that would wipe away important protections. I do not think that the danger of an unlawful use of court proceedings by an unlicensed landlord is likely. It is quite obvious that the court forms would have to be amended so that everyone who brought an action for eviction would have to produce their licence. Therefore, that is not a real worry either. 
 At the moment, there is no duty on anyone to tell the tenant that the landlord does not have a licence. The tenant has no protection from pressure to pay the rent all the same, or from threats of eviction that they might not be stout enough to rebut because they might not know their exact legal position. Clause 83 requires further thought and I invite the Under-Secretary to consider that that may be appropriate. Some of the ideas suggested today might be helpful, but I do not think that the amendment is the way forward.

Andrew Selous: I rise to support the hon. and learned Member for Redcar. I agree with the points that she has made, and there is perhaps just one further point to add. If the landlord is not receiving rent during that period, he might get his own back by not effecting necessary and important repairs that need to be done during that period. He could claim that he was not receiving the rent that he needed to undertake them.

Yvette Cooper: This debate has raised a series of interesting issues. First, I want to address some of the simpler points. Clause 83 provides for further sanctions for the period in which a property that should be licensed under selective licensing is not so licensed. That is an offence, and during any such period that a property remains unlicensed clause 83(2) provides that no rent is payable by occupiers and no charge can be made in lieu. That reflects what clause 62 provides for HMOs.
 The provision does not apply where a landlord has applied for a licence and a decision has not yet been taken. Clause 82(7) sets out the case for occasions when 
''the authority have not decided whether to serve a temporary exemption notice, or (as the case may be) grant a licence, in pursuance of the notification or application''.
 We can be clear that the rent provisions in clause 83 should not affect those tenants waiting while their landlord applies for a licence. 
 Secondly, I refer to the worries that were voiced about whether the tenancy is unlawful. Clause 83(4) states that 
''nothing in this Part affects the validity of any tenancy or licence under which a person occupies a Part 3 house during a period to which that subsection applies.''
 It affects rent, but clause 83(4) was particularly provided in response to the worries of the Select Committee that scrutinised the draft Bill, for fear that the decision not to provide a licence would have an impact on everything affecting the tenant.

John Hayes: I am grateful to the Under-Secretary for making it absolutely clear that my argument about the vagaries of a local authority not granting a licence is covered under the Bill, and I acknowledge the point that she made. Is she saying that an HMO can operate lawfully without a licence? If she is saying that other aspects of the tenancy agreement are ineffective in law, she is arguing that, to a degree, an HMO can operate lawfully without a licence. That is the salient point of the debate.

Yvette Cooper: No, I think that the effect of the Bill is that it is not lawful for a landlord to continue operating and charging rent in those circumstances,
 because he does not have a licence and he needs a licence to be able to charge rent on the property. The other matter that I need to clarify at this point is that it is not open to a local authority simply to refuse to grant a licence for a property that has a sitting tenant when the landlord simply does nothing. In those circumstances, it must take out an interim management order.
 We are due to discuss interim management orders later, but the local authority becomes the manager of the property. The landlord continues to own the property, but the local authority becomes the manager of it. Detailed provisions will be set out in the orders about what happens to the rent. Some of it will need to be held back by the local authority so that it may conduct the necessary repairs and act as manager. If there were surplus rent, it would be passed on to the landlord.

John Hayes: I want to be absolutely clear about the issue because it is the salient point of the debate. Is the Under-Secretary saying that, although it is not lawful for a landlord to charge rent in the circumstances she described, other aspects of the relationship between the landlord and the tenant remain lawfully in place even when a licence has not been granted?

Yvette Cooper: What I am saying is that clause 83(4) was drafted to respond to the worries of the Select Committee. It states:
''Except to the extent provided by subsection (2)''—
 with regard to rent— 
''nothing in this Part affects the validity of any tenancy or licence under which a person occupies a Part 3 house during a period to which that subsection applies.''
 Therefore, under clause 83(2) it is unlawful for someone to be charging rent on the property, when that person has been refused a licence. That means, in effect, that if clause 83(4) were not in place, the whole tenancy would become unlawful. As it is in the Bill, the tenancy remains lawful but, under clause 83(2), it is not lawful for the landlord to charge and receive rent if he has had a licence refused. 
 Let us suppose that the local authority has refused the landlord a licence. What happens next? The landlord must apply for an interim management order and, in those circumstances, the local authority becomes the manager. Just because the landlord is not fit and proper for whatever reason, it does not mean that it is not possible for the tenancy to continue. The tenancy can continue under an interim management order. I shall explain the incentives for the landlord in such circumstances. He does not have an incentive to evict a tenant and get another tenant in, because it would be equally unlawful for him to take rent from another tenant because he does not hold a licence. He might have an incentive to evict the tenant and live in the property himself; in practice, given the types of property and the low-demand areas about which we are talking, it is unlikely that he would want to do so. 
 The greatest financial incentive for the landlord is probably to allow the local authority to take out an interim management order under which he would continue to receive some income as a result of rent continuing to be paid.

Sally Keeble: I shall be grateful if my hon. Friend will reply to the following question—at a slightly later date if need be, because I do not want to delay the Committee. Is there a slight risk that, knowing how landlords will find every scam going, some of the rogue landlords might offload properties for local authorities to manage, given the high management costs of some of these properties?

Yvette Cooper: That is a risk. There is an issue about ensuring that local authorities do not end up holding the baby with a huge series of obligations. We will discuss later the provisions surrounding interim management orders, the way in which they can be turned into final management orders if necessary and the options available to local authorities.
 The hon. Member for Kingston and Surbiton raised concerns that tenants will not know their rights: they will not know whether the landlord is licensed, or the implications. However, it is clear that in any circumstances the local authority will know that there is a property at issue because it will have just refused a licence. In the process of refusing a licence it will have to make a judgment about whether the property is occupied by a tenant. If it is, that is when it will have to take out an interim management order. 
 The local authority will have had to engage with the property and the landlord in some detail. These are not properties that are hidden so that the local authority does not have a clue what is going on because they have not come to its attention in any way. That provides some reassurance that the tenants will not simply be isolated without knowing their rights, and without anyone else knowing where they are and what their experiences are. If the local authority refuses a licence and there is a sitting tenant, the local authority will have to take out an interim management order instead. 
 The first option that has emerged from the debate is the suggestion by my hon. and learned Friend the Member for Redcar that the landlord should continue to get rent but be subject to continuing fines. It is an interesting suggestion. I am happy to consider it further, but it raises a difficult question. If someone is not a fit and proper person to be a landlord in these circumstances, why should we allow them to continue to get rent on the property? It is difficult to justify why such a landlord, who has failed all the important tests of being a fit and proper person and failed in their duties to deal with antisocial behaviour or whatever else it might be, should continue to receive rent. Therefore the first option, which is to say that they should continue to receive rent, is a difficult one to deal with.

Vera Baird: I did not make a concrete proposal that that should be permitted; I simply voiced the worry about generating friction and using the tenant as a way of reinforcing the state's displeasure. But the way to deal with that if we want to consider allowing the rent to be paid is to fine the rent off the landlord on a daily basis.

Yvette Cooper: That may be something that we could address. When my hon. and learned Friend suggests that we are creating a tension between the
 landlord and the tenant on a daily basis, we should bear it in mind that the interim management order will have come into place. There will not be a long pause before the local authority takes any further action; it will have had to introduce an interim management order.

Vera Baird: This is supposed to be a helpful intervention; I hope that I am not getting in the Under-Secretary's way. The interim management order duty comes in not only in this position but also when there is no reasonable prospect of the property's being licensed, which is another decision that the local authority has to take. Let us suppose that the landlord is unlicensed for a while and, when he or she is taken to court, says, ''All right then; I will in due course apply for a licence''. Will the local authority be able to put an interim management order in place at that time? What happens to show that he is committing the crime of being unlicensed in the six months it takes for the case to reach the magistrates court? One cannot put an interim management order in place at that stage, because the evidence of the conviction would be necessary to show that the landlord was operating unlicensed. Therefore I do not think it is quite as straightforward as has been suggested.

Yvette Cooper: My hon. and learned Friend raises important points. We can address many of these points in the debates on the next part of the Bill, which concerns the interim management orders and the way in which they would come into force. I will, if I may, fail to answer her points at this stage and we will come back to them later.

John Hayes: There will be a delay.

Yvette Cooper: A delay—I thank the hon. Gentleman for his helpful suggestion. As part of resolving this debate, we do need to have a detailed discussion on the way in which the interim management orders will work.

Richard Younger-Ross: The points raised by the hon. and learned Member for Redcar regarding what happens to rent and the non-payment of rent are valid. If there is, from the tenant's perspective, a rent-free period, it creates a perverse incentive for them to stand in the way of a resolution of the antisocial behaviour, or whatever issues are holding up the licence. Would it not be better if, in such cases, the rent were paid to the local authority, rather than having a period in which the tenant did not pay anything?

Yvette Cooper: In practice, that is exactly what should happen as soon as the interim management order is in place. Once that occurs, the tenant should then continue to pay rent to the local authority, which effectively becomes the manager of the property, and the local authority then takes responsibility for deciding whether the rent needs to be used to repair the house in any way, or whether there is surplus rent that can be passed on to the landlord. The length of the period is a matter for debate during consideration of part 4, in which we will have plenty of opportunity to discuss in detail the periods concerned, and how
 long it is likely to take to get an interim management order in place.
 The first issue is that it is quite difficult to argue that the landlord should be able to continue to receive rent directly from the tenant in circumstances where they are simply not a fit and proper person to hold the licence and to be a landlord. However, the second issue is whether, having failed to meet the test to become a licence-holder, people should then lose a whole series of property rights and not be able to exercise their rights under section 21 of the Housing Act 1988. Requiring that to happen would be going considerably further. It might be, for example, that the landlord was not dealing with antisocial behaviour, and that this was a tenant who should be evicted. 
 This measure would give that tenant considerable security in the property by saying that the landlord could not exercise his rights under section 21 of the 1988 Act. It would also prevent a landlord from saying ''Okay, I could not hold the licence, so I will live in the property myself'', should he wish to do so, and exercise his rights under section 21 of the 1988 Act to give proper notice and to repossess the property in that way. I think that is difficult to argue that because the landlord is not a fit and proper person to hold a licence, the tenant should be given the security of tenure that would challenge a much wider range of property rights than we have previously discussed. 
 I recognise that there are difficulties raised by the situation, and that is why the provisions to which I referred in clause 83(4) were put in, responding to the Select Committee's concerns, and also why the provisions surrounding the interim management orders were put in place. We do recognise the concerns, but to go as far as the hon. Member for Kingston and Surbiton has suggested in his amendment would bring in a much wider set of questions concerning the property rights of the landlord, who remains the owner, even though they are an unfit person to rent out the property in this area.

Robert Syms: I raise a small point concerning the person who may have loaned money to the individual and who may also have rights in this matter. That will no doubt be dealt with at a later stage, but there may be a series of events, including an interim management order, that leads the mortgage company to take on the property because the money is not flowing through to pay the interest or the repayments.

Yvette Cooper: The hon. Gentleman is right. This is perhaps not the place to deal with all of the consequences of the relationship between the mortgagee and mortager. I would conclude by saying to the Committee that the situation is complex. We have tried to provide a series of safeguards, including the interim management orders, to be used where appropriate to support tenants. However, to go as far as the provisions in the amendment would be to raise a wider and more difficult set of questions that are not really appropriate. We have a chance to debate later the interim management orders and how they would work.

John Hayes: I hear what the Under-Secretary says about the debate that we shall have later, but would she go as far as to say that she is prepared to consider the matter because of the points raised by the hon. Member for Kingston and Surbiton, the hon. and learned Member for Redcar and myself, which are also supported by other Committee members? I am not asking for any guarantee, but will she look at the matter again because there are important issues that warrant further examination?

Yvette Cooper: As I have said, I am happy to look further at the matter. Interesting questions have been raised as part of this debate, and as part of the previous debate. They will be elucidated further during the next debate. We shall look further at the issue, but it would be inappropriate to go as far as the amendment would, and I shall ask the hon. Member for Kingston and Surbiton to withdraw it.
 Officials have also asked me to make a clarification. When we were debating clause 77, I said that I would return to the Committee on that point. Given that we cannot yet be precise about how long it will take us to respond to that, and I cannot guarantee that I will do so in Committee, I shall certainly ensure that I write to Committee members when we have made further progress on clause 77. On that basis, I ask the hon. Member for Kingston and Surbiton to withdraw the amendment.

Edward Davey: I can assure the Under-Secretary that I am not going to press the amendment to a Division. It was designed as a probing amendment, and it has been very helpful in provoking the debate. It was good that the hon. Lady gave assurances to the hon. Member for South Holland and The Deepings that she would go away and consider the matter again. I have begun to understand the issue a little more as the debate has progressed, as other hon. Members have spoken. I have begun to understand the complexities that we are dealing with. Nevertheless, that does not mean that the provisions are quite right yet, although I now understand a little more about how the interim management orders will relate to the licensing regime.
 Concern was raised about the time period, and how quickly the interim management orders will come into place. Are we talking about a matter of days and weeks? Are we to allow a landlord to have several months to decide what action he will take during the period that he is not receiving any rent? The practical considerations will be absolutely key to whether or not the problems we have been discussing actually occur. I hope that the Under-Secretary will be able to discuss the interim management orders and give some clarity on their timing. 
 The Under-Secretary talked about incentives, and I understood the force of her argument, but I wonder whether there will be incentives for the landlord to offload the property to another landlord. I know that there are provisions in the Bill covering associates of landlords which are intended to prevent the continuing shuffling of property between different people, perhaps in the same family, to avoid regulations. However, there may be an incentive to offload property between different landlords, and the Under-Secretary must be clear that that will not be possible. 
 The other incentive is sale. The Under-Secretary may say that the seller would not receive a high price. Perhaps not, but the incentive will still be there, particularly if the house has appreciated a little. There are some incentives for landlords to act in a way that would be deleterious to tenants' interests. This is a serious issue. 
 I am glad that we have had this debate and that the Under-Secretary gave us assurances. We will need to return to the matter, probably on Report, because it is important and perhaps the hon. Lady, through written communication with members of the Committee, could give us a little more reassurance that the perverse incentives that we are concerned about will not happen. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 83 ordered to stand part of the Bill. 
 Clause 84 ordered to stand part of the Bill.

Clause 85 - Index of defined expressions: Part 3

Amendment made: No. 48, in 
clause 85, page 57, line 7, at end insert— 
 'Residential property tribunal 
 Section (Residential property tribunals)'.—[Yvette Cooper.]
 Clause 85, as amended, ordered to stand part of the Bill. 
 Further consideration adjourned.—[Paul Clark.] 
 Adjourned accordingly at twenty-seven minutes past Four o'clock till Tuesday 3 February at ten minutes past Nine o'clock.